Jan. 10, 2021
I agree with the comment made by Jesse R. Hynes on Coil.com. It speaks to how I feel about this matter. The SEC has harmed me as an XRP holder for more than 3 years. The SEC is supposed to protect investors, not cause direct harm to them. The SEC provided NO CLEAR rules or regulations on what constitutes a digital asset as a security or a currency and thereby it’s lack of clarity was DIRECTLY harmful to the digital asset space. From Jesse R. Hynes: “To your credit, you do cite to Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO. In all fairness, however, said statement effectively says nothing more than “a digital asset that meets the definition of a security is a security.” With all due respect, this is no more helpful than the Supreme Court telling us that “Free Speech is all the speech that is free.” This Act was created in 1934. Obviously, that is before the internet existed. How can you use guidelines from an act before the internet was created and apply it to assets that are being created because of the internet? That seems incredibly ridiculous. So in this space of the Wild Wild West companies tried out new ideas. Oh wait, I believe that is called, innovation? Therefore, why are these companies being punished in innovating when the government has refused to regulate and give the companies rules by which they should try to operate within ALL ALONG, rather than waiting on the sidelines to see what was going to happen. To me that seems a little bit like watching a child take a crayon and start to draw. At first it is on paper, and you are not really sure what kind of art they will create, but it seems fun and innocent at first. Then they take chalk and draw on your carport area. That seems innocent enough. Then they take washable paint and draw on your outdoor furniture. Hmmmm, that’s getting a little bit outside of the realm of comfortability, but it is washable and it is outside furniture, so okay, no big deal. Then they take a permanent pen and decide to draw all over the walls of your house, in every corner, on everything that you own. It is now permanent. At what point should you have stepped in? At what point did you know that it was going to go from little acts to an explosion of an act that is more permanent? At what point should you have explained to the child the rules of creating art in a way that you would prefer for that child to create art. And by the way….maybe some other more progressive family (like another country) would have been completely okay with the child creating permanent art all over their house because maybe 20 years down the road that child was actually Van Gogh and the art is priceless? Oh and finally - is the child to blame, or are you? Do you then go and punish the child for drawing on your walls permanently as you had watched this child slowly and growingly expand their art over time? Do you send the child to jail (equivalent to the SEVERE punishment that the SEC is bestowing upon Ripple). I would argue that it was you, as the parent, who failed to take action when you should of, and therefore whatever consequences that have unfolded is for you to shoulder the blame. In a case like this I can’t even see how the child should be held responsible for their action, even if you don’t agree with the outcome of it. As Jesse R. Hynes notes in his metaphor: “….imagine a world where the Supreme Court defined what a horse is before ponies, donkeys and mules walked this earth. Now imagine that you were trying to regulate horse drawn carriages without first clarifying and making clear distinctions of same outside of an antiquated definition of horse made before the world knew that ponies, donkeys, and mules would walk the earth. Is a donkey a house? Is a mule a horse? Is a pony a horse? IS A DIGITAL ASSET A SECURITY? The Digital Asset Space deserves an answer better than “sometimes it is, sometimes it isn’t… …the absolute worse type of action that you could do in a scenario like this would be to wait 7-8 years and then take a reactive step in suing a [company] that you believe is violating your unstated policy beliefs.” And to be clear, your policy beliefs regarding what is a security are at the very best, vague.” This goes back to my point about SEVERELY punishing a child who you watched this entire time grow their art abilities to greater and greater heights, when they suddenly seem to fall out of steps with rules that you felt were implicit, but were absolutely not implicit to a child. Why would a child know that creating art in the ways that were done before was the correct way to do it but creating art in this other way (use of permanent maker on your house), was not the correct way to do it. This is a child who is in a space and position that it was NEVER IN PREVIOUSLY. In addition, your judgement about what is right and wrong in this situation, might again be different from someone else’s judgement. For example, this child could have been at grandma’s house and did the same thing and grandma called it a masterpiece worth millions and delighted in it, while you saw the same thing and saw it as pure destruction. How is the child supposed to be able to know the difference? You and grandma are both adults, both family, both knowledgeable. Therefore if grandma calls it a masterpiece, shouldn’t that mean that if it is done at your house it would be viewed the same way? This lack of clarity will wreck havoc on the child, and punishing the child for wrongdoing in your house that is right doing in grandma’s house will just make everyone upset at each other and the child will be left to never want to do art again, period. Getting back to Jesse R. Hynes argument about this situation: “Take for example, the case of XRP. No foreign country has determined XRP to be a security. Rather, foreign countries have done the exact opposite (including Japan that has determined XRP to be a crypto asset and the UK which has determined XRP is not a security). The SEC in bringing this lawsuit is in direct opposition with the other G7 and G20 countries as to the classification of a digital asset.” Hmmmm. Sounds like the issue between grandma calling permanent art in the house a masterpiece and you calling the same art destruction. Finally from Jesse R. Hynes: “…the SEC should be on the forefront of pressuring Congress to regulate. Congress is the only authority that matters here. Statutory authority is necessary to avoid piecemeal legislation. The SEC should do what it was empowered to do by the Security Exchange Act of 1934 - be the voice and protector of the investors. You don’t do that by picking and choosing winners by suing one company regarding one digital asset when there are hundreds of others that would fall into the same category. You don’t bring forth a reactive lawsuit and then ride away into the sunset saying “good luck future commissioner!” The SEC behaved badly on this matter and did the EXACT OPPOSITE of what its’ mission is - it did not protect investors. It harmed them in a situation where major economic and political significance was at hand. Undo your wrong-doing. Declare XRP the currency that it is recognized to be all over the world and allow it to play on level playing field with Ether and Bitcoin, just as you have given a free-pass to Ether and Bitcoin and allowed them to dominate the crypto space because of this free pass. This is the LEAST you can do because you have actively harmed investors. Then get to work regulating the crypto space with the HELP of congress. Do it the right way. Be true to your mission. Cryptocurrency is not going away. Either we lose in playing the game because the SEC and congress takes America out of the game and let’s the rest of the world keep on playing, or we win in the game because WE CREATE THE RULES that ensure our success in the game. Which side do you want to be on? For America, or against it? Sincerely, Lisa Kahikina.